Is There Still a Golden Dilemma?

22 Pages Posted: 4 May 2024 Last revised: 7 May 2024

See all articles by Claude B. Erb

Claude B. Erb


Campbell R. Harvey

Duke University - Fuqua School of Business; National Bureau of Economic Research (NBER)

Date Written: May 7, 2024


The real, inflation-adjusted, price of gold is high. Historically, a high real gold price has been associated with low inflation-adjusted gold returns over the subsequent 10 years. Further, historically the realized 10-year rate of inflation has had close to no impact on realized 10-year nominal and real gold returns. An influx of investment in gold (from gold-owning ETFs, Costco shoppers, “de-dollarizing” central banks and possibly others) has seemingly doubled the real price of gold relative to pre-influx times. Today’s golden dilemma is yesterday’s golden dilemma: has an influx of gold buying ushered in a new age of permanently higher “this time is different” real gold prices or is this simply the latest “wash, rinse, repeat” cycle setting-up a significant fall in real gold prices?

Keywords: Gold, golden constant, real gold, overshoot, inflation, de-dollarization, ETF flows, hedging, risk management, central banks, emerging markets

JEL Classification: G10, G11, G12, G15, G28, E58, N20

Suggested Citation

Erb, Claude B. and Harvey, Campbell R., Is There Still a Golden Dilemma? (May 7, 2024). Available at SSRN: or

Claude B. Erb

TR ( email )

CA 90272
United States

Campbell R. Harvey (Contact Author)

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States
919-660-7768 (Phone)


National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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